Industry on the Rebound

Things are looking up for the foodservice industry, according to Technomic, the Chicago-based hospitality industry consulting and research firm. In June, Technomic revised its original 2010 foodservice industry forecast from a 1.6 percent decline to a positive growth trend, calling for a 0.6 percent gain, with full-service restaurants and hotels leading the pack.

Though the numbers are up slightly, David Henkes, vice president and adult beverage practice leader at Technomic, warns that this upswing comes from the industry being down so much in 2009; any improvement means the industry is growing. In a recent column for Nightclub & Bar’s VIBE e-newsletter, he stated there are still concerns “about many of the underlying macroeconomic indicators, and longer term growth will not be nearly as robust as what our industry saw five or even three years ago.”

Discounting and bundling help drive traffic, he noted, but with food costs and gas prices rising, operators need topline growth to continue this improvement. As for beverage sales, Henkes predicted that until recovery is more fixed, drinks will play a role in driving sales and profits, but overall alcohol sales will lag behind overall restaurant sales.

“As consumers begin to return to restaurants, they’re still going to be cautious with their dollars and will be going to those places that provide a unique, differentiated experience,” he explained. “This means casual restaurants will need to keep working at doing a better job of showing why consumers should be coming back to their restaurants, not their competitors’ venues.”